The Charter - Selling your Project 13-09-18 08(27

The charter
selling your project

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CONFERENCE PAPER ǀ Program Management , Portfolio Management , Strategy ǀ 10 September 2005

Brown, Alex S.
ARTICLE ǀ PMO , Strategy , Decision
Making , Portfolio Management ,
How to cite this article: Program Management ǀ 1 February 2018
Brown, A. S. (2005). The charter: selling your project. Paper presented at PMI® Global
Project Management Journal
Congress 2005—North America, Toronto, Ontario, Canada. Newtown Square,
PA: Project Management Institute. Knowledge
Contribution as a
Introduction Factor in Project
Selection
The charter is a project's best marketing tool. It is created at the very start of
By Geng, Shuang | Chuah,
the project, when the selling of the project's goals and ideas needs to begin. It
Kong Bieng | Law, Kris M. Y. |
is an ideal place to document the relationships between the project and the
Cheung, Che Keung | Chau, Y.
organizational strategy. Yet the charter is one of the least talked about
C. | Rui, Cao ǀ Project selection
deliverables in project management. Scheduling and communication have
is a crucial decision-making
generated far more attention.
process in many organizations.
Too many project managers accept a limited role in the framing of the charter. By adopting a project-based
The project manager does not need to write the charter, but the project learning perspective, this
manager has a role in the process. The project manager needs to demand an study sets out to develop a
adequate charter, and be prepared to create one for the sponsor, if the sponsor framework to integrate
does not provide it on his or her own. organizational…

Some project managers fail to get an adequate charter because they do not
ARTICLE ǀ Change Management ,
recognize the key components of a charter. A charter should be simple, Strategy , Portfolio Management ,
Program Management ǀ 1 February 2018
straightforward, and short, but it must contain certain key elements. Once the
basic components of a charter are clear, it is possible to give it a central role in PM Network
the organization. The charter has a critical influence on any application of Taking Flight
organizational strategy, organizational project maturity, program
management, and portfolio management. By Ali, Ambreen ǀ Mexico is
building momentum. After
The charter has grown in importance and visibility in recent years. The third years of liberalizing the
edition of A Guide to the Project Management Body of Knowledge (PMBOK® economy, the country's
Guide) added a new process “Develop Project Charter,” making it a more government is welcoming
visible deliverable than in the 2000 edition. That document remains an organizations from around the
exception, though, with many program and portfolio management experts world to back big-ticket
projects, and spur growth.

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The Charter - Selling your Project 13-09-18 08(27

giving little attention to this vital project management step. There is an ARTICLE ǀ PMO , Strategy , Portfolio
opportunity for more integration of the charter into enterprise-wide Management , Program Management ǀ 1
January 2018
approaches to project management.
PM Network

What Is a Charter? India's Ascent

By Parsi, Novid ǀ Metric
The PMBOK® Guide, 3dEdition defines a project charter as “a document issued depiction of projected growth
by the project initiator or sponsor that formally authorizes the existence of a in India's GDP, including 5
project, and provides the project manager with the authority to apply sectors to watch and
organizational resources to project activities.” (PMI, 2004, 368) The key word persistent challenges.
in this definition is “authority.” It authorizes both the project and the project
manager.
WHITE PAPER ǀ Strategy , Portfolio
The PMBOK® Guide lists specific information that the charter should provide, Management , Program Management ǀ
September 2017
either directly or by reference, including:
PMI White Papers
Requirements
Winning in the 21st
Business needs
Century
Summary schedule
By Mahon, Charles R. |
Assumptions and constraints Driessnack, John D. ǀ This
paper proposes a
Business case, including return on investment
decentralized portfolio
This list is normative, providing guidance on what a charter “should” provide. A structure that embraces
document can still be a charter, even if it omits one of more of the information agility as a way the U.S.
items on the list. If a return-on-investment (ROI) calculation were truly Department of Defense might
required for a project charter, then few projects could be said to have a win in the 21st Century.
charter; experts still argue over whether an ROI calculation is meaningful for
regulatory or mandated projects and many IT projects lack ROI analysis. ARTICLE ǀ Innovation , Complexity ,
PMO , Strategy , Portfolio Management ,
Some project managers may be misled by the word “document” in the Program Management , Leadership ,
Sustainability ǀ 1 March 2017
definition and by the specific list of information in PMBOK. They fear that they
do not have a project charter unless they have a specific document formatted PM Network
with certain headings. PMBOK® Guide does not mandate the use of any The Power to
specific document format, and project charters can take many forms. Often Adapt
the charter appears in the form of a free-form e-mail or memo.
Emerging markets are full of
The definition itself gives the critical questions that determine, “Does a project opportunities—if
have a charter?” These questions are: organizations can mitigate all
Does the sponsor know the project exists, and does the sponsor agree that the risks. For EDS USA LLC,
it should exist? (authorize existence) the biggest challenge to
developing renewable energy
Does the sponsor know who the project manager is and does he or she projects in West Africa is
support that person's leadership of the project? (authorize the project managing…
manager)
Has the sponsor given the project manager authority over money, people,
and other organizational resources, in order to accomplish that project?
(authority to apply resources)
Has the sponsor ever written an e-mail, written a memo, spoken at a
meeting (preferably a meeting with documented minutes) indicating, even

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implicitly, a “Yes” answer to the questions above?

A “yes” answer to these questions means that the project has a charter.
Restated this way, it is clear that all successful projects must at some point
have been chartered. If a project were not chartered, the project manager
would likely be fired for insubordination if he or she expended any time,
money, or other resources on it. In most organizations, it is not possible to
make progress without authorization from someone.

Common Misconceptions about Charters

The term “project charter” is often misunderstood. Less-experienced project
managers often believe that it must be a very formal document. The word
“charter” is used in English to describe executed contracts or deeds, often
founding papers for cities, educational institutions, or even governmental
bodies. Traditionally a charter is a formal, legal document. Traditional charters
can be quite short and simple, but few people think of them that way.
A project charter is quite different. Typically it is not prepared by lawyers and a
project charter might not carry any legal weight. The project charter is
authorizing a temporary endeavor, not an educational institution, not a state,
and not a country's constitutional government.

Due to these misunderstandings, many project managers actually have a

charter and do not recognize it. They offer many reasons to explain why they
do not have a charter or cannot develop one:

“There is no one document that provides the authority, the project name,
the business needs, and the project manager's name!”
“We have a document with all the right information, but the sponsor did
not write it.”
“My boss just told me to do it. Then he e-mailed me all the documents I
need to get started. I have no charter.”
“We are not through the requirements-gathering phase, so how can we
possibly have a charter yet? We do not know what the requirements are.”
“We typically develop our charter after several weeks of research into the
project. It meets all the PMBOK definitions for a charter, and it includes
quite a lot of detail about the project requirements. Schedules and budget
rarely slip much from the ones authorized in the charter.”

Not Always One Document

A project charter does not need to be contained in a single document. Ideally,

one document will authorize the effort and include references to other
documents that show business need, milestone schedule, and other key
information. If authority has been provided, and the sponsor has approved
project-related documents that include all of that information, then that

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collection of documents effectively forms the charter. Even if they do not

explicitly cross-reference each other, the collection of documents can be
considered a charter.

In many companies that perform project work on behalf of clients, the work
order may serve as a key component of the project charter. In these
companies, the work order gives specific people authority over organizational
resources.

The signature of a customer at the bottom conveys authority from the

customer-side, and the counter-signature of an officer of the consultancy
makes the agreement binding on the consultant-side. Work orders often
provide short explanations of the scope of the work, or they refer to more
detailed specifications. Work orders can serve as a self-contained project
charter or a component of a charter.

Not Written by the Sponsor

Sponsors are often senior executives with little time. Expecting them to write
and deliver a complete project charter may be impossible for even a project-
oriented organization. Senior executives often employ speech writers and
ghost authors when crafting important messages. The project manager should
be prepared to serve in a similar role, drafting or even writing the final copy for
the charter. The sponsor must authorize it, not write it. Depending on the
company, authorization may be delivered by a formal signature, a formal
chartering ceremony, or simply a reply e-mail saying, “I agree. Proceed.”

For projects that are sponsored by a committee or a group of people, it is

particularly impractical to have the sponsors author the charter. Typically the
project manager or one of the sponsors will write the document and the
others will approve it.

“My Boss Just Told Me To Do It”

It is common when the project manager's direct manager authorizes the

project, for the project manager to feel that there is no charter. In all
likelihood the project manager has the strongest charter that anyone could
ask for. When a manager tells a subordinate to start a project, the lines of
control and authority are clear. The initial assignment may be informal and
undocumented, but the manager will typically reinforce that charter in writing
and verbally on a regular basis through status reports, formal meetings, and
informal discussions. Normal day-to-day work will lead to some
documentation of the assignment. The manager will usually issue a written
statement at some point making clear that the project has been authorized.
When the manager provides documents about the desired results, the
manager is documenting requirements, business needs, and other parts of the
project charter. This document trail is the project charter.

Some managers rarely create documents about assignments, though. Project

managers who work for these managers should consider writing a brief e-mail
or note confirming the conversation that started the project. The note might

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begin, “As we discussed earlier today…” and follow with notes from the
conversation and a summary of key documents the manager provided. This
note does not need to take a special form. Using free-form text it can fill all
the requirements of a project charter.

Some project-management experts might argue that the manager needs to at

least confirm in writing, “Yes, I agree,” for that note to be a charter.
Documentation makes it stronger and is highly recommended, but a project
can be successfully chartered, executed, and completed even without that
documentation. An orally-communicated charter is still a charter. If the
project manager honestly got the assignment and the authorization of
resources, even verbally, the project should be considered chartered.

“We Are Not Done With Requirements”

In order to issue a charter at the very start of a project, the charter's author
must create it based on only partial information. The PMBOK® Guide
recommends including “requirements,” “schedule,” and “budget,” but it will be
impossible to give detailed versions of any of these pieces of information at
the very start. Instead, prepare the charter based on the limited information
available at the time.

By necessity, the charter will give a far shorter explanation of requirements

than would follow a detailed requirements analysis. Information Technology
project managers particularly suffer from misconceptions on the term
“requirements.” There has been a long history of complaints that IT projects
under-deliver, so softwaredevelopment experts urge IT professionals to
understand requirements completely and in detail before doing any design or
coding. IT project managers should not use that advice as justification to avoid
documenting an early statement of business needs and requirements. A good
charter can contain high-level requirements statements; those statements
may in fact help to guide and focus a detailed requirements-gathering phase.

When people say, “We are not done with requirements,” often that is a sign
that the initial charter must be one with a small scope. The charter might only
authorize an effort to gather the detailed requirements. This charter would
then answer questions about how the requirements must be gathered, what
their business purpose is, and so on. This charter could remain completely
silent on questions of what will ultimately be delivered.

It is possible that requirements may be completely unknown, and a charter for

the full scope of the project is impossible. It is always possible to define some
basic requirements and business needs for the earliest phase of the effort.
Perhaps a research and development effort might begin with a project charter
that defines the business need and requirements around a marketplace
challenge and the need to find solutions to it. Future phases of the project
could revise the project charter to include more concrete, more specific
requirements.

Detailed Project Charters

®
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A member of the Project Management Institute (PMI®) Financial Services

Special Interest Group (SIG) discussion group posted a sample charter
template that contained 32 headings and sub-headings, and could be up to
twenty-five pages in length (Cuffe, 2004). In many organizations, this
document would be considered a detailed project plan, sufficient for the full
and complete budget and schedule commitment for the project. A document
of this form might be necessary, but it could not be the original charter for the
effort. It could be the charter for a second phase of the project, but not the
first. Too much time and effort is required to prepare such a plan. In the classic
cycle of “Initiate-Plan-Execute-Control-Close,” the document would have
required substantial investment in planning and perhaps early execution.

The charter is created at the Initiation phase, before significant resources are
assigned. An early project charter should typically be short, perhaps a few
pages in length. They can be as short as a part of a single page, so long as they
clearly provide authority to the project and project manager.

Longer, heavily structured documents are often critical to organizational and

project success. These documents will replace the short, early charter as the
governing document for the project team. This evolution is natural and should
be encouraged. The charter is best understood, though, in its simplest form,
when it turns an idea in someone's head into an authorized project. Master
both the long and short forms of this important document.

One Project, Many Charters

A typical project will have many charters. A good project manager needs to
understand the scope of the current charter and look ahead to establish the
charter for the upcoming phases of a project. According to PMBOK® Guide
each phase of a project goes through the initiation processes, and each has a
charter (PMI, 2004, 82). Many project managers struggle to identify their
initial charter, as discussed above. Identifying the charter for each phase of
their project is even more difficult, because it is usually even more subtle.

Hierarchy of Charters
Some projects will move from phase to phase without any ceremony or
celebration. The customer or sponsor might have little understanding of the
phases, so it is difficult to see how he or she could authorize the charter for
each phase. Without the authorization of the sponsor, it does not seem that
there could be a charter for a given phase.

The sponsor has given the project manager authority over the internal project
activities, including the movement from one phase to the next. Because the
sponsor granted the project manager with authority for the overall project, the
project manager can be the authorizing agent for each phase within the
project.

When the project manager defines the work breakdown structure (WBS), he or
she defines the organization of the work and the phases of the work. Usually
each phase or deliverable has a definition that includes a business need. Some
deliverables might be technical, with little obvious tie to the business needs

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listed in the original project charter. The project manager explains the business
need of each phase or deliverable through the WBS and other project
documents. When the project manager authorizes work on the first task in a
phase or deliverable, he or she is essentially delivering a charter for that phase
or deliverable. He or she is authorizing the start of the phase with the work-
order. The WBS and related project documents provide the business
justification and other elements of a charter.

Authority in a project has a hierarchy. The project manager typically gets

authority from the sponsor. The project manager may then authorize work
within the scope of the sponsor-provided authority. Some projects might
contain team leads, sub-project managers, and other people to whom the
project manager grants authority. In some cases these leads and managers will
issue charters of their own.

When the Sponsor Must Re-Charter

In other projects, the sponsor may use the beginning or end of a phase as an
opportunity to authorize the project again. The initial charter may have limited
scope or limited definition. For instance, in a research and development effort,
the initial charter might only authorize investigation and research up to a
certain dollar budget. Before that budget ceiling is hit and before the project
moves into development, the project manager must get a new charter from
the sponsor. Without a new charter, the project would be unauthorized.

The updated project charters may appear very different than the initial project
charter. They may include detailed work-plans, budgets, lists of specific
deliverables, and other items. These updated charters may be many pages, and
include all the elements of a detailed project plan. Sometimes the
development of the plan for the subsequent phase is one of the final
deliverables of a project phase. These updated charters may include all the
components of a detailed project plan.

Sometimes unforeseen events make a project's charter irrelevant. Often the

project team will get authorization for gradual changes to keep the work
relevant, and the charter may grow increasingly stale. For these projects, the
change requests may have become the new charter for the project. The project
manager may find it helpful to ask the sponsor to approve a revised charter
officially. Having a new charter can help to

Focus team efforts around a single documented vision

Improve team morale by recognizing the project changes officially
Improve access to organizational resources by confirming executive
support for the project

When and whether to seek a new charter, will depend on the specific
circumstances and policies of the organization.

The Charter and Organizational Strategy

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Many project managers aspire to contribute to organizational strategy, but

few have a voice in it. Project managers long to be involved in the earliest
decisions regarding their projects. Many want to help shape the strategy that
drives the organization to launch projects. By creating and negotiating a
charter the project manager has a chance to work at a strategic level in the
organization. He or she can be visible to strategic thinkers in the organization.
A great charter joins strategy to execution. The charter can make sure that the
project's relationship to organizational strategy is clear.
A charter is ideal for critically examining whether a project truly supports
organizational strategy. The project is new, so investment is low. If the project
is not truly aligned with organizational strategy, the charter is the best chance
to stop that project before resources are wasted. If project managers
consistently stopped misaligned projects before they started, there would be
far fewer failed projects.

The charter is short but should contain the business needs or goals. Details of
implementation are not known yet. Organizational strategy operates on
exactly this level — business needs and goals, without implementation details.
People can quickly compare a project charter to a vision statement, a business
plan, or a strategy document and determine if the two are compatible. The
charter provides a very pure expression of the business intent. Drafting the
charter is a unique opportunity to align the project clearly with overall
business goals.

Getting Your Organization Started With Charters

Some project managers complain about executives starting projects without

understanding what it takes to get them done. They wish that these
executives would talk to the project managers before launching these projects,
to get feedback on how to do them right.

The truth is that these executives do talk to the project managers.

They talk to project managers when they make assignments. They talk to the
project managers when they authorize the project. They talk to the project
managers when they provide the project charter. Many project managers are
not prepared to take advantage of these brief opportunities to have a voice in
organizational strategy.

The best chance to have strategic input is at the start of the project
assignment. When approached with a new assignment, the project manager
has a responsibility to ask for certain information and for clear authority.
Merely asking clarifying questions about the assignment begins a subtle
negotiation over the nature of the project and the scope of the authority being
provided. Negotiating for a solid project charter from the start will position
the project manager as a strategic thinker in the organization. Negotiating
changes to the charter later will reinforce that position.

The project manager should immediately ask critical questions at the time of
project assignment. If the relationship of the project to organizational strategy
is unclear, the time to ask is during the assignment. If the relationship is clear,

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the charter is a vehicle to document those assumptions clearly and to get

confirmation from the sponsor that the assumption is correct. If the project is
already underway when a project manager is assigned, reconfirming the
existing charter or writing a new one is a great way for the new project
manager to establish credibility.

The project manager also needs a definition of the boundaries of his or her
authority. The form of that definition will vary by organization, but the project
manager shows maturity by asking these questions early. A charter is a
statement of authority and support from the sponsor. A professional project
manager will demand a clear charter before starting work and especially
before asking team members to act on his or her behalf.

The Project Manager as Charter Author (or at least

ghostwriter)

Leaving the authoring of the charter in someone else's hands is essentially

leaving the promotion, the marketing, and the direction of the project in
someone else's hands. The best sponsors will perform those roles well, but not
all do. Too many project managers despair because their project sponsors will
not write down a charter in a clear form. The definition of the charter does not
include any mention of who writes it, just who “issues” it. Project managers
can draft the charter themselves, and then ask for approval of it. It is essential
that a person with sufficient authority approve the charter and stand by it; it
does not matter at all who writes it.

In some cases, the project sponsor may be unwilling or unable to approve the
draft charter. Sponsors may ask for change after change, or may refuse to
approve. Unwillingness to approve a document is a sign of misunderstanding,
lack of support, or worse. A professional project manager should stop work
until the situation is resolved. Proceeding on a project without any
authorization and definition is a recipe for disaster.

The Charter, Organizational Process Maturity,

Program Management and Portfolio Management
The charter provides a unique opportunity to improve organizational maturity,
because it provides an opportunity to

Decide whether to proceed;

Consider organizational goals and strategy;
Control the authorization and deployment of organizational assets.
By setting standard processes and controls for the authorization of new
projects, organizations have an opportunity to improve their project
management processes dramatically. Because one of the core functions of
portfolio and program management is to control the start-up of projects,
establishing standards for project charters can benefit these disciplines as well.

Establishing Consistent Processes to Charter Projects

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There have been volumes written about implementing program or portfolio

management processes, yet relatively little about processes for chartering a
project. I believe that chartering projects that has more impact on the overall
program or portfolio performance than any other project management
process. Controlling which projects start, when they start, and what business
needs they address brings a huge benefit to the organization. These processes
have the potential to avoid waste on unsupported or misdirected projects.
Because the charter happens at the very start of a project, the potential
savings are 100% of the project budget and schedule; there is no better
possible savings for a failed project.

Because the charter is simple, the processes to authorize and approve a charter
can be simple as well. At Mitsui Sumitomo Insurance Group, USA (MSIG USA),
we have a template, called the “Opportunity Document.” The document is
two or three pages in length when completed. The appropriate “Chief Officer”
signs off on the opportunity. A Strategic Planning Office Manager and a Chief
Planning Officer administer the whole process and help people through it.
They recommend a sponsor and project manager. A committee of five senior
officers of the firm, including the President and CEO, review the proposal. The
committee approves it, rejects it, or asks for changes. Once it is approved this
opportunity document serves as an iron-clad charter for the effort. The project
manager has the blessing of the top officers of the firm, and their decision is
captured in the minutes for the meeting. Not all the projects in the company
finish successfully, but all projects in the company are authorized. The process
is documented in a three-page procedure. The procedure and the template are
available to everyone in the firm through the company intranet. Projects have
gone from idea to authorized project in as few as seven calendar days; the time
could be cut to one or two days in an emergency. To date, the approval
process has never delayed the start of a project. Once the idea was fully
understood, the approval was always received before a team could be freed
from other assignments.

This process helps MSIG USA ensure that management has authorized any
major effort. By capturing objectives, high-level estimates of size, and
interdependencies in a short document, the project teams have a reference
whenever they are uncertain of the scope of their authority. Other
organizations could adopt a similar procedure. Some organizations have more
levels of authority, perhaps based on budget size or work-hours, but the basic
principles of the review and approval can be simple. Most importantly, the
process can be short.

Potential Area for Further Organizational Maturity Study

Organizational Project Management Maturity Model (OPM3®) includes several

questions about project, program and portfolio “initiation” in its basic
assessment tool (PMI, 2003, 76-85) and makes charters a key element of
these initiation processes (PMI 2003, 130, 150). Introductory books on project
management often make reference to the charter. Typical portfolio and
program management approaches focus on project selection methods and

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other ways to analyze the content of a project portfolio. It remains to be seen

whether the upcoming Program and Portfolio Management standards from
PMI will embrace the project charter as a key vehicle for shaping and
controlling programs and portfolios.

Project charters are an area for potential research and development. PMI has
focused in recent years on linking project management to business results; the
authorization and start-up of a project is one of the best opportunities to join
project management to core decisions about business results. I recommend
other authors and researchers to investigate this topic more fully.

References
Cuffe, Don. (2004, Feb 6). Project Charter Template. PMI FSSIG Knowledge
Center On-Line Discussion Group. Retrieved on 7/4/2005 from
http://finance.groups.yahoo.com/group/PMIFSSIG/message/711 (URL only
accessible to PMI FSSIG members)

Project Management Institute. (2000) A guide to the project management

body of knowledge (PMBOK®) (2000 ed.). Newtown Square, PA: Project
Management Institute.

Project Management Institute. (2004) A guide to the project management

body of knowledge (PMBOK®) (Third ed.). Newtown Square, PA: Project
Management Institute.

Project Management Institute. (2003) Organizational project management

maturity model (OPM3®): Knowledge Foundation. Newtown Square, PA:
Project Management Institute.
This material has been reproduced with the permission of the copyright owner.
Unauthorized reproduction of this material is strictly prohibited. For permission to
reproduce this material, please contact PMI or any listed author.
© 2005 Alex S. Brown, PMP
Originally published as a part of 2005 PMI Global Congress Proceedings –
Toronto, Canada

© 2018 Project Management Institute, Inc. USA

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